The keynote address was delivered by Prof Andreas Barckow, President of the German standard-setter Accounting Standards Committee of Germany and Vice-President of the European Financial Reporting Advisory Group (EFRAG). In his presentation, he took stock of the current situation in financial reporting, other (wider) corporate reporting, and technological aspects (proliferation/dissemination).

His thought-provoking points included the statements that in financial reporting there have been no major developments in Europe since 2005, that the current approach seemed to continue to try to apply a "manufacturing-centric" accounting model to an increasingly service-oriented industry (which might indeed be fostering the use of non-GAAP measures), and that the difficulty of addressing a problem should never be an excuse for not addressing it (this was said in the context of intangibles). Prof Barckow also pointed out that while there is one international accounting standard-setter (the IASB), there are up to 1,000 organisations active in the field of wider corporate reporting. On technology, he stated that the current thinking is still focused on printed reports, which means to ignore the vast posiibilities technological developments offer that could see for example ideas such as the CORE & MORE approach to corporate reporting realised.

The panel discussion following the keynote address was moderated by Prof Katherine Schipper of Duke University and saw as panelists Prof Axel Haller, University of Regensburg, Prof Paul André, HEC Lausanne, and Prof Barckow. They picked up several aspects mentioned in the keynote address:

• No major developments in financial reporting since 2005. While the point was at first contested in extreme form, the panelists by and by concluded that there was some validity to it. It was even stated that IFRS 9, IFRS 15, and IFRS 16 replaced standards that many in practice saw as working well, i.e. that were not broken. The new standards often also build on ideas that had been around for a long time - in some cases since the 1990s. While moving from incurred losses to expected losses with IFRS 9 was indeed a conceptual change, however, it was stated that in practice even under IAS 39 preparers were already half way to expected loss accounting. In the end, the moderator even questioned whether 2005 was a reporting development or merely a convergence development.
• Non-GAAP measures. After quickly clarifying what had been meant by the non-GAAP measure problem in the keynote address, panelists discussed whether non-GAAP measures were a problem at all. They concluded that not the non-GAAP measures were a problem in themselves ("non-GAAP measures come and go") but the lack of reconciliation or indeed lack of reconcilability was. Nevertheless, panelists refused to place the fault entirely with the preparers. Comments included that the increased use of non-GAAP measures expressed a management approach and showed that "the true North" was not always where the standard-setters believed it to be. It was also stated that the use of these measures showed that we are on a way away from standardised accounting. It was in this context that the IASB's work on management performance measures was brought up and questioned as it would indeed cling to a broader boundary question that tries to define what gets in and what must be left out. It was noted that trust was about systems and processes, not about printed reports, and that the non-GAAP measure problem could be addressed by moving away from the paper approach.
• Intangibles. Intangibles were described not only as a concern but as a growing concern as the economy is more and more service-oriented and there are many intangible assets that never show up on a balance sheet although the market clearly sees them. After an intervention from the audience that noted that the logic should not be that the markets see something and then the accounting needs to explain it, the panelists agreed that the problem was not so much in not recognising intangible assets but rather in the question why there was often such a gap between an entity's market capitalisation and the profit (or lack of profitability) shown in the financial statements.There was not necessarily a need to align the two numbers but there should be a way to reconcile them. The new definition of an asset in the revised Conceptual Framework was mentioned and questioned, especially in the context of research and development costs.
• Sustainability. Panelists were asked which way forward they saw for wider corporate reporting or rather linking sustainability and other wider corporate reporting aspects with financial reporting. The wish was expressed that the many organisations on the sustainability side would combine under the umbrella of (ideally) one, and the clear favourite was the Global Reporting Initiative (GRI). The IASB could then work together with that one organisation and concentrate on areas where the requirements overlap to harmonise them so that for example not several concepts of materiality clash. Again the CORE & MORE concept was brought up where not only the sustainability organisations would combine but also the IASB and the remaining organisation would be brought together under one even larger umbrella that would also include other corporate reporting organisations.
• Academic contribution to standard-setting. The standard-setter on the panel was asked what he thought researchers could contribute to standard-setting. He replied that he saw two ways he would want research to support standard-setting: (a) by confirming (or refuting) that certain problems (such as mentioned in the keynote address) existed and (b) if indeed the existence of a problem was confirmed to then offer thoughts and solutions. He clearly advocated normative research in this case and expressed disappointment that at least as far as he was aware no research had been contributed to the revision of the Conceptual Framework of the IASB, which would have been a prime opportunity for normative research. His fellow panelists agreed and concluded that research should lead standard-setting and not just try to follow it.

The following additional information is available on the website of the Bucharest University of Economic Studies:

• Slides for the keynote address
• Information on the full programme of the AMIS 2018

The objective of the first implementation guide, Revenue From Contracts With Customers (Including Remodeling of Revenue and Cost of Revenue Presentation in the Statement of Income), is to “demonstrate the modeling for disclosures related to revenue from contracts with customers under [ASC 606] and the remodeling of revenue and cost of revenue presentation in the statement of income.”

The second implementation guide, Dimensional Modeling for Disclosures of Consolidated and Nonconsolidated Entities, provides examples “to help users of the Taxonomy understand how the modeling for disclosures of consolidated and nonconsolidated entities is structured within the Taxonomy.”

While the Securities and Exchange Commission expects the two standards to coexist, challenges remain for U.S. companies that have international subsidiaries that will need to report under IFRS 9 for statutory purposes and for U.S. subsidiaries of international companies.

What are turning out to be the most disruptive changes? The areas of divergence that will likely have the largest impact are twofold: the new time value election, and the related requirement to calculate “aligned time value.”

Review the full article on Accounting Today's website.

Filings with serious deficiencies can be defined as those that are “not minimally compliant with statutory or regulatory requirements.” Letters issued on June 15, 2018, or later will be published first; these letters will appear on EDGAR within 10 calendar days of issuance.

The article noted the "seismic change" IFRS 17 is expected to have on insurance companies as well as the user community. Though implementing the Standard may be turbulent, Ms. Fisher emphasized it's impact: "it will make a huge difference to the consistency and comparability of insurance companies."

The article explains:

• The "trouble" with IFRS 4, the interim insurance contracts Standard;
• comparability and transparency; and
• impact around the world.

Review the article is available on the Boards's website.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

• Rate-regulated activities (1–9): ASAF members discussed (1) unit of account and asset/liability definitions and (2) scope of the model. In addition, the ASAF members discussed the development of communication materials.
• Disclosure initiative — Principles of disclosure (10–24): ASAF members discussed (1) location of information that includes IFRS information outside of financial statements and non-IFRS information within financial statements and (2) accounting policy disclosures.
• Commodity loans and related transactions (25–43): ASAF members discussed several topics related to items described in the Board’s January 2018 meeting. These include: (1) the extent that entities in their jurisdictions enter into transactions, (2) diversity in accounting, (3) standard-setting activities, and (4) potential standard-setting activities.
• Accounting policies and accounting estimates (44–48): ASAF members were provided feedback on Exposure Draft, Accounting Policies and Accounting Estimates, and provided views on next steps for the project.
• Is financial reporting still an effective tool for equity investor in Australia? (49–51): ASAF members viewed a presentation from by the AASB on financial reporting’s effectiveness for equity investors in Australia.
• Goodwill and impairment (52–71): The ASAF members discussed (1) a staff proposal that amends the impairment testing of goodwill by considering movements in headroom and (2) the IFRS 3 requirement to recognize all identifiable intangible assets acquired in a business combination separately from goodwill.
• Primary financial statements (72–88): ASAF members provided views the Board’s tentative decisions to date on the application to financial entities and aggregation and disaggregation.
• IFRS Foundation Due Process Handbook review (89–99): ASAF member were updated on the Trustees’ review of the Due Process Handbook and provided views on its scope.
• Project updates and agenda planning (100–104): ASAF members were updated on the IASB research pipeline and provided advice on how to proceed with the post-implementation reviews of IFRS 10, IFRS 11, and IFRS 12.

A full summary of the meeting is available on the Board's website.

IAS 29, Financial Reporting in Hyperinflationary Economies defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the International Accounting Standards Board (IASB) does not identify specific jurisdictions. The International Practices Task Force (IPTF) of the CAQ monitors the status of "highly inflationary" countries. The Task Force's criteria for identifying such countries are similar to those for identifying "hyperinflationary economies" under IAS 29.

The IPTF's discussion document for the May 16, 2018 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

• Angola
• South Sudan
• Suriname
• Venezuela

Countries with projected three-year cumulative inflation rates exceeding 100%:

• Argentina
• Democratic Republic of Congo

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

• Sudan

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

• Ukraine

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

• Egypt
• Libya
• Yemen

Review the full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force are available on the CAQ website.

SAB 118 permits companies to assess, record provisional amounts and ultimately finalize disclosure of the financial impact of tax reform over a “measurement period” of up to one year from the date of the legislation’s enactment.  However, Mr. Teotia clarifies that SAB 118 does not allow companies to defer reporting of tax reform’s impact.

The measurement period ends when an entity has completed the process necessary to finalize its assessment of tax reform’s impact – and for certain income tax effects, that could be well before the one year mark.

Review the full speech on the SEC's website.

The first point made in relation to financial reporting regarded general purpose financial reporting, special purpose financial reporting, and the expectation gap that results from confusing or mixing these two forms of reporting. While general purpose financial reports come with the objective of providing financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity, special purpose financial reports are prepared using a particular framework to address specific needs of specific users and these frameworks can include intentions to achieve a certain behaviour. Mr Bricker warned against applying expectations regarding special purpose financial reports to general purpose financial reports and against beginning standard-setting with additional objectives in mind that go beyond providing decision useful financial information.

Nevertheless, Mr. Bricker expressed the belief that general purpose financial reporting needs to continue to evolve and the standard-setters must continue to strive to set standards that provide the best information to a broad baseline of investors and investment advisers while preparers need to use judgement in applying the standards.

The second point Mr. Bricker made followed on from the need to continue to advance general purpose financial reporting to address expectations around financial reporting and any gaps that might exist. He stressed that everyone in the financial reporting structure needs to support the work of the accounting standard-setters and that thinking needs to be shared.

Review the full speech on the SEC's website.

For Karim Hajjar, the link between sustainability and value is clear, though he might quibble with the strict use of the word sustainability. "If people ask me if I am a strong believer in sustainability I will say no", he says. "I am actually a big believer in sustainable value". And he made the difference clear in a statement he made in Solvay’s latest integrated report. "With over a 150 years of history we are deeply aware of the importance of value that stands the test of time", he wrote. "Sustainability without strong profits is unsustainable, while strong profits to the detriment of sustainability undermine the longevity of a business’" He is also increasingly clear on the strong links between ESG, environmental, social and corporate governance factors, and share price and returns.

In a video interview, he explains how integrated thinking should be the driver for integrated management, how investors are catching up, slowly, with an understanding of how all these ESG factors feed into the bottom line, and the value that non-financial, (what he calls extra-financial), measures create when strongly linked to the traditional financial measures. And he talks of how all these benefits provide much greater clarity in the quality and effectiveness of management.

Read the entire column on our Global IAS Plus site.